Feb 10, 2012.

A judge upheld a state permit on Thursday that would allow a proposed $10 billion oil refinery to be built in South Dakota. The state Board of Minerals and Environment made no mistakes in issuing an air quality permit to Hyperion Resources, Circuit Judge Mark Barnett of Pierre ruled. The company's proposed refinery north of Elk Point would be the first new U.S. oil refinery built since 1976.

Lawyers for three groups opposing the project have argued that the air quality permit approved by the board was flawed because a more thorough environmental study should have been done and the permit does not require sufficiently stringent technology to control pollution.

The judge said the board did not have to conduct a more thorough environmental review, and did not have authority to require a complete environmental impact study. The board argued its consideration of the permit took into account all relevant environmental issues.

Barnett also said the board properly applied the best available control technology to deal with pollution that could be produced by the plant. ''This court is unable to find any error in the findings of fact and conclusions of law of the BME,'' Barnett wrote.

Barnett also upheld the board's decision to extend the deadline for starting construction on the project until March 2013. When completed, the plant is expected to process 400,000 barrels of Canadian tar sands crude oil each day into low-sulfur gasoline, diesel, jet fuel and liquid petroleum gas.

Lawyers for Hyperion and the groups opposing the project did not immediately return phone calls seeking comment Thursday. The project would include a power plant that produces electricity for the refinery. It would use a byproduct of the refinery process, solid petroleum coke, which would be turned into gas and burned to produce electrical power.

Hyperion, based in Texas, contends the refinery would be a clean, modern plant that would use the most advanced, commercially feasible emission control technology. The Sierra Club and two local groups, Save Union County and Citizens Opposed to Oil Pollution, argue the refinery could emit too much pollution and hurt the quality of life in the rural area.

The Board of Minerals and Environment originally issued an air quality permit in August 2009 that called for construction to begin by Feb. 20, 2011, but company officials said the project was delayed because the recession caused problems in securing financing. The original permit also was appealed in court, and Barnett sent the case back to the board for some further proceedings.

The board issued a revised permit in September, approving changes to reflect updated national air quality standards and new pollution-control technology. The revised permit also gave the company additional time to begin construction.

By Aberdeen News